A new administration spells trouble for the Affordable Care Act

One of the first orders of business for President Trump was to begin to repeal the ACA.

EDITOR’S NOTE: This is one of three articles by different staff writers covering the repeal of the Affordable Care Act. The other two can be found here and here.

The House of Representativesvoted on Friday, January 13 on a congressional budget resolution that would begin the repeal of sections of the Affordable Care Act (ACA). The Senatevoted on the same measure the previous day, with broad support from Senate Republicans. In the House, not a single Democrat voted in favor of the budget resolution, while Republican Sen. Rand Paul of Kentucky broke ranks and voted against the resolution.

The budget reconciliation process allows for parts of the ACA to be repealed. Because the reconciliation process cannot be filibustered by an opposing political party like a normal piece of legislation, the Senate was able to pass the resolution with a simple majority, which requires less than the sixty votes necessary to overcome a filibuster. After the House approved the measure on Friday, a congressional committee will now draft instructions for the budget committee on which parts of the ACA should specifically be repealed. That repeal legislation must then be passed in both chambers of Congress with a simple majority, before it is presented to the President to be signed.

“One possible consequence of congressional action would be invalidation of federal contracts with insurers, a move that would allow insurance providers to exit the ACA market.”

The Congressional Budget Act of 1974 expedites Senate consideration of budgetary measures by containing debate on proposals to a mere twenty hours. For the process to work, any budget resolution must be passed by both chambers before a Congressional committee drafts reconciliation legislation that is tied to passing the budget. This process can only be used for laws that are under the purview of the Congressional Budget Office (CBO), which overviews laws that cost money or are used to levy taxes. In 2012, the Supreme Court held that the penalty that some citizens pay under the ACA is a valid exercise of the federal taxing power in National Federation of Independent Business v. Sebelius, placing the ACA under the purview of the Congressional Budget Office.

One possible consequence of congressional action would be invalidation of federal contracts with insurers, a move that would allow insurance providers to exit the ACA market. However, congress would not be able to alter certain provisions of the ACA without replacement, as opposed to repeal, legislation. One example of this would be to once again allow health insurance companies to deny coverage based on pre-existing conditions would require new replacement legislation. That type of legislation would be subject to the possibility of a filibuster.

In a news conference on Wednesday, Jan. 11, then President-elect Donald Trump stated that the ACA would not be repealed without a replacement plan. As of the House vote on Friday, January 13, there was no proposed replacement legislation, a fact that worried some Republicans, including Rep. Charlie Dent of Pennsylvania, who expressed “serious reservations” about repealing parts of the health care law without clear replacement legislation.

“…there would be no more federal subsidies to help individuals purchase health insurance plans, and many buyers would be financially unable to purchase the same plans without federal assistance.”

During then President-elect Donald Trump’s inauguration, nine Republican governors met with Republicans in Congress to share their concerns about repealing the ACA. John Kasich, the current Republican Governor of Ohio and former presidential candidate, wrote a six-page letter to members of the House and Senate in which he encouraged them to keep components of the ACA, and shared ways to improve the law. The Republican governors represented states such as Texas, Idaho, Utah, and Florida. Half of the governors at the meeting opted to expand Medicaid in their respective states and expressed concern that they will not continue to receive the same amount of federal dollars to support their state Medicaid programs. Congressional leaders have given no indication of how they will handle the Medicaid funding issue, with only seventeen Republican senators hailing from states that have expanded Medicaid coverage.

A report from the Congressional Budget Office (CBO) estimated that a repeal of the ACA would result in 18 million people losing their health coverage within the first year. Additionally, repeal would result in insurance premiums rising an estimated twenty to twenty-five percent in the first year. The Congressional Budget Office based its projections on H.R. 3762, an unsuccessful ACA repeal law that was passed in the House in 2016. That law proposed an elimination of the federal mandate that everyone have some type of health insurance. With that provision of the ACA eliminated, there would be no more federal subsidies to help individuals purchase health insurance plans, and many buyers would be financially unable to purchase the same plans without federal assistance. Health insurance companies fear that, in the case of a repeal of the ACA, individuals would only purchase health insurance once they were sick, which would drive up the cost of the average plan. According to the CBO, if left unchecked, that would leave 32 million people uninsured within ten years.

“From 2016 to 2017, deductibles for the average silver plan increased by twenty percent, to an average deductible of $3,703 dollars.”

Critics of the CBO report point out that the calculations assume there would be no replacement legislation enacted after the repeal of the ACA. H.R. 3762, the basis of the CBO report, left many of the ACA’s regulations in place while eliminating most of the revenue provisions. That is an unlikely scenario, considering the promises of the new administration to both repeal and replace the ACA.

Legislators intent on repealing the ACA have pointed to the rising premiums of many purchasers as proof that the act should be removed. The rising cost of premiums has been attributed by some to the increasing number of regions where only one insurer is on the health insurance exchange. In 2016, four percent of the regions in the U.S. had only one insurer on the exchange. In contrast, thirty-six percent of the regions in the U.S. have only one insurer on the exchange in 2017. However, as of December 2016, 300,000 more people than the previous year had signed up for coverage on the ACA’s exchange. ACA plans come in different tiers, with silver plans being the most popular. From 2016 to 2017, deductibles for the average silver plan increased by twenty percent, to an average deductible of $3,703 dollars. Unlike deductibles for silver plans, deductibles for gold or platinum plans actually decreased. More than half of the purchasers on the exchange qualify for federal subsidies to help off-set the costs of the insurance plans.

Representative Tom Price of Georgia has been selected as President Donald Trump’s Secretary of Health and Human Services. He has drafted a replacement plan for the ACA, but that plan has not been evaluated by the budget office. Both House Speaker Paul Ryan and Senator Mitch McConnell met with Price to evaluate alternative plans, and it is likely that a piece of draft legislation for the ACA’s replacement will emerge at the end of January when Republican leaders leave Washington for their annual policy retreat.

Meredith Ballard is a 2017 graduate of Campbell Law School and served as a Senior Staff Writer for the Campbell Law Observer. She is originally from New Bern, North Carolina and graduated from Appalachian State University in 2014 with a Bachelor of Science in Psychology. She is also a graduate of the Mira Foundation’s guide dog program in Quebec, Canada. After her first year of law school, Meredith interned at Disability Rights North Carolina, a protection and advocacy organization tasked with providing legal representation to individuals with disabilities. During her second year of law school, Meredith’s moot court team became regional finalists in the American Bar Association’s National Appellate Advocacy Competition. During the summer of 2016 Meredith will be interning at the North Carolina Medical Board. Meredith is a member of the Campbell Public Interest Law Student Association and her interests are in health law, disability law, and employment discrimination law.

This is a full recording of the debate hosted by the Federalist Society and the American Civil Liberties Union chapters of Campbell Law School. The speakers include Dr. John S. Baker, Jr. and Elizabeth Haddix.